Publications

(Article from Registered Funds Alert, February 2016)

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M&A Transactions:

• London Stock Exchange Group plc announced that it approved the proposed sale of Frank Russell Company’s asset management business, Russell Investments, to TA Associates. The gross proceeds earned from the transaction by the London Stock Exchange Group plc will equal $1.15 billion, with $1 billion payable in cash upon completion, and the remaining $150 million paid in four equal cash installments starting on December 31, 2017.
• Segall Bryant & Hamill, an investment management firm with $9.7 billion in assets under management, announced its acquisition of Trees Investment Counsel, LLC, which provides investment counseling and management services for affluent investors, families and trusts and estates. SBH’s Private Wealth Management team currently manages over $3 billion in assets.
• Edelman Financial Services LLC announced that it entered into a definitive agreement to be acquired by certain affiliates of Hellman & Friedman LLC, a private equity firm that has raised over $35 billion of capital since its founding in 1984. Edelman provides financial planning, investment management, 401(k) plan services to individuals, families and businesses and currently manages over $15 billion in assets.
• NorthStar Asset Management Group Inc., a global asset management firm focused on managing real estate and other investment platforms both in the United States and internationally, announced that it entered into a definitive agreement to acquire an approximately 85% interest in The Townsend Group, which provides investment management and advisory services to approximately $180 billion of assets, with a focus on real estate. Subject to the terms and conditions of the purchase agreement, NorthStar will acquire the interest in Townsend for approximately $380 million.
• WisdomTree Investments, Inc. announced it entered into an agreement to acquire GreenHaven Commodity Services, LLC, which is the managing owner of the GreenHaven Continuous Commodity Index Fund, and GreenHaven Coal Services, LLC, the sponsor of the GreenHaven Coal Fund. Wisdom Tree is an exchange-traded fund and exchange-traded product sponsor and asset manager headquartered in New York. It will acquire GH Commodity and GH Coal for $11.75 million in cash consideration.
• MB Financial Bank, N.A., a commercial bank based in Chicago with approximately $15 billion in assets, entered into an agreement to acquire MSA Holdings, LLC and its wholly-owned subsidiaries MainStreet Investment Advisors, LLC and Cambium Asset Management, LLC. MainStreet provides investment advisory services for insurance companies, banks and independent trust companies. It also functions as a sub-advisor, providing investment recommendations, research, marketing and investment manager support to its investment manager clients. Cambium provides wealth management services such as separate account management, retirement planning and small account platform services.
• Affiliated Managers Group Inc., a global asset management company with aggregate assets under management of approximately $619 billion agreed to acquire an equity interest in three investment managers: Ivory Investment Management LP, Abax Investments (Pty) Ltd and Systematica Investments LP. Ivory is a Los Angeles-based investment firm, and its aggregate assets under management are approximately $3.6 billion. Abax is a Cape Town-based investment manager specializing in South African equity, fixed income and strategic and tactical asset allocation strategies, and its assets under management are approximately $5.4 billion. Systematica is a technology-driven investment firm with offices in Geneva, London, New York, Singapore and Jersey, and it manages approximately $8.8 billion in assets.
• BlackRock, Inc. announced that it will assume $87 billion of assets under management from Bank of America’s Global Capital Management. The acquisition will increase BlackRock’s global cash-management business to approximately $370 billion. The transaction is expected to close in the first half of 2016, and it is subject to the approvals of fund boards, fund shareholders and regulatory agencies. BlackRock, Inc. also, in a separate transaction, agreed to acquire FutureAdvisor, a digital wealth management firm with over $600 million in assets under management.
• Baird signed an agreement to acquire Chautauqua Capital Management, a global investment manager based in Boulder, Colorado that manages growth-oriented international and global equity portfolios for institutional investors. Meanwhile, Baird focuses on wealth management, capital markets, private equity and asset management, with approximately $152 billion in client assets. Chautauqua Capital Management will continue to operate under its name but will join Baird Investment Management, Baird’s institutional equity asset management business.
• Conning Inc. announced that it agreed to acquire New York-based Octagon Credit Investors LLC, a credit investment firm that manages $12.8 billion in assets through its various investment vehicles, which include collateralized loan obligations, bank loans and high yield bonds. Octagon will operate as a subsidiary of Conning Inc. following the closing of the transaction.
• IG Group Holdings Plc, a UK based global online trading company with offices across Europe, Africa, Asia-Pacific, the Middle East and the United States, announced that it completed its acquisition of InvestYourWay Ltd., an online investment manager that builds bespoke investment solutions. The acquisition will allow IG Group Holdings Plc to expand its offerings to a wider range of ETF-based portfolios per its partnership with Blackrock. 
• Raymond James Financial, Inc. entered into a definitive agreement to acquire Deutsche Asset & Wealth Management’s U.S. Private Client Services unit, which provides financial services to sophisticated and high-net-worth clients and institutional investors in large metropolitan areas. The Private Client Services unit will operate under the Alex Brown, Inc. brand of Raymond James Financial, Inc.
• AGF Management Limited acquired a majority of the equity of FFCM LLC, a Boston-based ETF advisor and asset management firm that creates, structures, and manages ETFs and is currently co-portfolio advisor of AGF U.S. Sector Class. AGF Limited is an independent investment management firm with over one million investors and approximately $33 billion in total assets under management.
• American Century Investments and the Stowers Institute for Medical Research announced that a non-controlling 41 percent economic interest in American Century Investments held by Canadian Imperial Bank of Commerce would be acquired by Nomura Asset Management. Nomura will purchase Canadian Imperial Bank of Commerce’s shares for approximately $1 billion. CIBC has held a non-controlling equity interest in American Century since August 2011.
• OppenheimerFunds, Inc., a global asset manager with approximately $220 billion in assets under management, finalized its acquisition of 100% of the equity interest in independent institutional investment adviser VTL Associates, LLC. The transaction, which was announced in September, expands OppenheimerFunds, Inc.’s client offerings into smart-beta strategies. As of September 2015, VTL managed $1.7 billion for its investors across 8 ETFs and separate accounts.

Closed-End Fund Initial Public Offerings:

RiverNorth Opportunities Fund, Inc. (NYSE: RIV)

• Amount raised: $72.6 million
• Investment Objective/Policies: The Fund’s investment objective is total return consisting of capital appreciation and current income. The Fund seeks to achieve its investment objective by pursuing a tactical asset allocation strategy and opportunistically investing under normal circumstances in closed-end funds and exchange-traded funds. Under normal market conditions, the Fund will invest at least 65% of its Managed Assets in closed-end funds and at least 80% of its Managed Assets in Underlying Funds. In selecting closed-end funds, the Subadviser will opportunistically utilize a combination of short-term and longer-term trading strategies to seek to derive value from the discount and premium spreads associated with closed-end funds. The Fund will invest in other Underlying Funds that are not closed-end funds to gain exposure to specific asset classes when the Subadviser believes closed-end fund discount or premium spreads are not attractive or to manage overall closed-end fund exposure in the Fund.
• Managers: ALPS Advisors, Inc. and RiverNorth Capital Management, LLC.
• Book-runners: Wells Fargo Securities, RBC Capital Markets and Stifel.

Nuveen High Income December 2018 Target Term Fund (NYSE: JHA)

• Amount raised: $261 million
• Investment Objectives/Policies: The Fund’s investment objectives are to provide a high level of current income and to return $9.86 per share (the original net asset value per common share before deducting offering costs of $0.02 per share) to Common Shareholders on or about December 1, 2018. The Fund’s subadviser seeks to identify securities across diverse sectors that are undervalued or mispriced. In seeking to return the target amount of $9.86 per share to investors on or about the Termination Date, the Fund seeks to utilize various portfolio and cash flow management techniques, including setting aside a portion of its net investment income, retaining gains and limiting the longest maturity of any holding to no later than June 1, 2019. As a result, the average maturity of the Fund’s holdings is generally expected to shorten as the Fund approaches its Termination Date, which reduces interest rate risk over time.
• Managers: Nuveen Fund Advisors and Nuveen Asset Management.
• Book-runners: Morgan Stanley, Wells Fargo Securities and Nuveen Securities.